GFT, the leading business, design and technology consultancy working with the top 10 global investment banks and hedge funds, today announced top trends impacting financial institutions as they strive to create ongoing value through digital enablement. These trends show an ongoing shift towards cost efficiency models, regtech innovation and a digitalized ecosystem.
The industry continues to be shaped through market uncertainty and the emergence of market opportunities through tech innovation around blockchain, machine learning and AR. Shifting regtech innovation will also maintain focus as banks struggle to remain compliant in this new environment as Dodd Frank changes become more apparent and MiFID II is delayed. These trends all point to a more value-driven, targeted approach towards a digitalized environment that involves cost efficiency models and ongoing regtech innovation.
Market Uncertainty under a Volatile Political Climate
Investors will remain cautious due to the new administration in the U.S. and equally volatile political climate around the globe.
Market-based measures of inflation expectations in the U.S. have spiked since the election. Rising interest rates across borders will increase the cost of capital, which will negatively impact many marginal fintech businesses. With this increased capital cost top of mind, new, riskier fintech start-ups will struggle for funding under a Trump administration.
Shifting Cost Efficiency Models
One major theme that has emerged is that banks are expected to demonstrate accountability and transparency their operations. Major big banking players have added data governance teams to drive cost efficiency forward, as the year progresses we will continue to see these teams grow. With ongoing regulation standards rapidly shifting, banks are expected to transparently comply to or else deal with expensive complications. Banks have now started expecting these risks and are setting aside funds to deal with these issues - however changing cost efficiency models also provide banks the support they need to drive positive change.
The Emergence of New Market Opportunity Around Automated Technology
As new technology emerges, developing tech such as blockchain, machine learning and AR will provide new market opportunities for financial organizations and fintech players alike. This developing technology will pave the way for ongoing banking automation as players move to full-scale digitalized approach:
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